Start-Ups Disrupt the Travel Trade

Start-Ups Disrupt the Travel Trade

Article excerpt

Upstarts like Uber, Airbnb and a few small airlines are creating
ripples in the established order.

For a heads-up on what to expect as the pace of business travel
picks up in early September, consider that airlines all summer have
been reporting planes more full than ever, flight delays are at six-
year highs and hotels are raising rates.

And everyone in the aviation industry is keeping a wary eye on
the splendidly named Bardarbunga volcano that is rumbling and
threatening to erupt in Iceland. The disturbance four years after
the last major Icelandic volcanic disruption, when the confoundingly
named Eyjafjallajokull volcano spewed ash into the atmosphere that
shut down European airspace for six days and stranded about five
million travelers in the spring of 2010.

So enjoy your holiday as much as you can. But keep in mind that
getting to your destination may entail headaches. About 14 million
people, up 2 percent from last year, are boarding those already
nearly full airplanes during the travel period from Aug. 17 to Sept.
2, according to Airlines for America, the industry trade group.

As fares and add-on fees steadily rise, airlines continue
"getting their financial houses in order," said John Heimlich, the
trade group's chief economist. In the first six months of this year,
he said, the top nine domestic carriers earned $3.8 billion,
compared with $1.6 billion during that period in 2013. And that was
despite the clobbering that airlines (and passengers) took over the
winter, when bad weather forced the cancellation of about 100,000
flights.

Clearly, the airlines are enjoying this era of growth, but for
fliers, there is a sense of resignation. The J.D. Power North
American Airline Satisfaction Study for this year underscores that,
finding that overall passenger satisfaction with airlines, even
considering added fees, rose significantly this year.

"It isn't that passengers are satisfied with fees, it's that they
are simply less dissatisfied because they realize that fees have
become a way of life with air travel," said Rick Garlick, the firm's
lead travel and hospitality researcher.

There are some tiny signs of disruption in the status quo,
however. As airlines have merged and consolidated routes, the era of
heady competition in air travel has faded. Still, a few small start-
up airlines have begun emerging again, among them La Compagnie, a
discount all-business-class airline that began flying a single
Boeing 757 between Paris and Newark this summer.

Also, the impact of millennial-generation business travelers is
creating some ripples, if not yet waves, in the established order,
at least in the lodging and ground transportation markets.

For example, United Airlines has begun promoting the use of Uber,
the ground-transportation innovator that allows people to hail rides
online, using its mobile app. …